It also requires the EU member states to achieve by 2020 a 20 per cent reduction in energy use below 1990 levels by improving energy efficiency.

The package furthermore obliges EU member states to ensure a 20 per cent share of renewable energy in the total energy consumption by 2020. Within this 20 per cent for renewables, it sets a target of 10 per cent for renewable fuels in the transport sector.

“To reach these targets, biofuels must deliver substantial reductions in greenhouse gas emission and should not come from forests, wetlands, peatlands and nature protected areas,” said the EU Delegation.

It said the guidelines lay down the requirements for certification schemes that want to be recognized by the European Commission, and describe the standards to be met for these schemes to gain EU recognition.

“The guidelines further describe the land-use criteria of the Renewable Energy Directive, explaining which types of land cannot be used to produce biofuels. These are natural forests, protected areas, drained peatlands, wetlands.

“Conversion of a forest to oil palm plantation would fail the sustainability requirements,” it said.

It said the guidelines also describe how to prove that the biofuels used have high greenhouse gas savings.

“Those that do not achieve the threshold of 35 per cent greenhouse gas savings compared to fossil fuels will not qualify for the incentives aimed at stimulating the use of biofuels.

“They can, however, continue to be imported into the EU,” it added.

The EU Delegation said the sustainability criteria do not apply to exports of Malaysian palm oil for consumer products such as food or cosmetics. At present, these represent about 95 per cent of Malaysia’s palm oil exports to EU.